Even the ‘moderate’ proposals would sabotage private coverage, driving everyone into a government-run system. That’s probably why Democrats don’t really answer questions about their health proposals.
For more than two hours Thursday night in Houston, 10 presidential candidates responded to questions in the latest Democratic debate. On health care, however, most of those responses didn’t include actual answers.
As in the past several contests, health care led off the debate discussion, and took a familiar theme: former vice president Joe Biden attacked his more liberal opponents for proposing costly policies, and they took turns bashing insurance companies to avoid explaining the details behind their proposals. Among the topics discussed during the health care portion of the debate are the following.
Most notably, Massachusetts Sen. Elizabeth Warren again declined to admit whether individuals will lose their current insurance, or whether the middle class will pay more in taxes, under a single-payer health care system. By contrast, Vermont Sen. Bernie Sanders claimed that while all (or most) Americans will pay higher taxes to fund his single-payer system, middle class families will come out ahead due to his plan’s elimination of deductibles and co-payments.
The problems, as Biden and other Democratic critics pointed out: First, it’s virtually impossible to pay for a single-payer health care system costing $30-plus trillion without raising taxes on the middle class. Second, even though Sanders has proposed some tax increases on middle class Americans, he hasn’t proposed nearly enough to pay for the full cost of his plan.
Third, a 2016 analysis by a former Clinton administration official found that, if Sanders did use tax increases to pay for his entire plan, 71 percent of households would become worse off under his plan compared to the status quo. All of this might explain why Sanders has yet to ask the Congressional Budget Office for a score of his single-payer legislation: He knows the truth about the cost of his bill—but doesn’t want the public to find out.
Believe it or not, Biden once again repeated the mantra that got his former boss Barack Obama in trouble, claiming that if people liked their current insurance, they could keep it under his plan. In reality, however, Biden’s plan would likely lead millions to lose their current coverage; one 2009 estimate concluded that a proposal similar to Biden’s would see a reduction in private coverage of 119.1 million Americans.
Minnesota Sen. Amy Klobuchar echoed Biden’s attack, saying that while Sanders wrote his single-payer bill, she had read it—and pointing out that page 8 of the legislation would ban private health coverage. (I also read Sanders’ bill—and the opening pages of my new book contain a handy reading guide to the legislation.)
For his part, Sanders and Warren claimed that while private insurance would go away under a single-payer plan, people would still have the right to retain their current doctors and medical providers. Unfortunately, however, they can no more promise that than Biden can promise people can keep their insurance. Doctors would have many reasons to drop out of a government-run health plan, or leave medicine altogether, including more work, less pay, and more burdensome government regulations.
While attacking Sanders’ plan as costly and unrealistic, Biden also threw shade in Warren’s direction. Alluding to the fact that the Massachusetts senator has yet to come up with a health plan of her own, Biden noted that “I know that the senator says she’s for Bernie. Well, I’m for Barack.”
Biden’s big problem: He wasn’t for Obamacare—at least not for paying for it. As I have previously noted, Biden and his wife Jill specifically structured their business dealings to avoid paying nearly $500,000 in self-employment taxes—taxes that fund both Obamacare and Medicare.
Tax experts have called Biden’s avoidance scheme “pretty aggressive” and legally questionable, yet neither Democrats nor Thursday’s debate moderators seem interested in pursuing the former vice president’s clear double hypocrisy about his support for Obama’s health care law.
I’ll give the last word to my former boss, who summed up the “contrasts” among Democrats on health care:
Dem debate on health care:@berniesanders: If you like your health plan, too bad, we are going to take it away now.
“Moderate” Dem: If you like your health plan, don’t worry, we will gradually take it away.#DemDebate #DemocraticDebate2078:47 PM – Sep 12, 2019Twitter Ads info and privacy104 people are talking about this
As I have previously noted, even the “moderate” proposals would ultimately sabotage private coverage, driving everyone into a government-run system. And the many unanswered questions that Democratic candidates refuse to answer about that government-run health system provide reason enough for the American people to reject all the proposals on offer.
Only if we developed a fondness for long waiting lines and ever more insurance mandates.
he United States has a complex health-care delivery system composed of private and government-funded insurance plans. Half of all Americans receive their health insurance from their employer or their spouse’s employer. Over 40 percent of Americans receive their health insurance from the government. The remainder are either uninsured or obtain health insurance through the private individual market. The current political debate concerns how large a role the government should play in our health-care delivery system.
The United States spends far more money per person on health care than other industrialized countries. Last year, overall medical spending in the U.S. totaled $3.5 trillion or 18 percent of the national gross domestic product.
Because other countries spend less on health care, they are often used as models for the U.S. Looking to other countries to solve our health care delivery system problems, however, may not be reasonable. Other countries are smaller than the U.S. and have more homogenous populations. What the people of one country favor may not be applicable or acceptable to people living in a different society.
According to a Forbes survey, the U.S. accounts for 38 percent of life-saving and life-extending medical innovations, compared to an average of 15 percent in other countries. The U.S. also leads the world in the research and development of pharmaceuticals.
In all other industrialized countries, the demand for health care is much greater than the money budgeted for it. The results of this supply/demand mismatch are chronic shortages followed by strict rationing of health care. The rationing can take many forms — from long waits, to denying the elderly access to certain procedures, to allowing individuals with political influence to receive priority attention from providers.
Canada has a truly single-payer, nationalized system that is totally funded by taxpayers. In 2018, wait times for specialty care averaged 20 weeks. In practice, Canada has a two-tiered system in the sense that officials allow their citizens to travel to the U.S. for privately funded health care.
Great Britain established a comprehensive government health-care system in 1948 that gives every citizen cradle-to-grave coverage. About 10 percent of the population has private insurance, and many physicians combine government entitlement work with private practice. Over the past year, 250,000 citizens have waited more than six months for planned treatments within the National Health Service, while 36,000 people have waited nine months or more.
Switzerland has a comparatively large private health-care sector, and patients are responsible for 30 percent of their own health-care costs. Consequently, a certain degree of health-care consumerism exists in Switzerland, and the country has been fairly successful in holding down costs. Unfortunately, as officials increase the number of benefit mandates required in insurance plans, health-care costs are rising.
Singapore has a multi-tiered system with different levels of care depending on the patient’s ability and willingness to pay more. This is similar to the system in the U.S. before the passage of Medicare and Medicaid: private hospitals and doctors treated paying patients and charity hospitals and residents-in-training cared for low-income patients.
Is there some combination of measures from other countries that the U.S. can use in reforming our health-care delivery system? Although the overall systems vary, the common factor for all other countries is government-mandated health insurance. Even those countries that have a component of “private” health care continue to mandate that every citizen have government-approved health insurance.
While universal health insurance coverage is a worthy goal, the critical point is using the best mechanism to allow the greatest number of Americans access to health care. Simply having health insurance in no way guarantees timely access to health care. The American experience with the Veterans Administration hospital system, a comprehensive, government-controlled, single-payer health-care program, reveals unacceptable wait times and huge inefficiencies.
The United States distinguishes itself from other countries by a broader use of free markets. Just like all other economic activities, the free market offers the best solution to provide the greatest access to health care and to control costs.
Instead of looking to other countries, health-care reform in the U.S. should allow Americans to freely make their own health-care decisions and use their own health-care dollars. This would give Americans the best chance to use their right to access health care. Eliminating third-party payers, greater use of health savings accounts, price transparency, and health insurance reform would put patients, rather than the government, in charge of their own health care.
We have been witnessing unprecedented innovations in medical treatments. In the coming years new drug therapies promise to provide solutions for some of the most pressing diseases — diabetes, cancer, heart disease, strokes, Alzheimer’s, retinal diseases — to name only a few. But if People for the “Ethical” Treatment of Animals (PETA) gets their way, most of the research that feeds the amazing future cures that we read about will be shut down or severely curtailed.
For the past few years PETA has undertaken a pressure campaign designed to intimidate airlines from transporting medical research animals. Even though it is illegal for the airlines to refuse to perform service, the campaign is proving successful in certain cases and a widespread adoption of this policy would likely stymie medical innovation.
PETA opposes all forms of animal testing despite the fact that the National Institutes of Health views such research as required by ethics and essential to finding cures. Scientists and researchers do as much research as possible with computer modeling and peer reviewed science, but at some point they must test the most promising medicines on living organisms. For example, pigs were used to develop both the ability to transplant a heart and the drugs that stop the body from rejecting the new heart. It was done ethically, with rigorous standards and oversight, and with anesthetics so as to eliminate pain for the animals involved. But PETA ignores all of this and labels these critical experiments the same as torture.
There are places were there is no animal testing. For example, in China, they test procedures and new products on humans who are prisoners of the state. So effectively, humans become the lab rats. That isn’t an improvement in ethics.
PETA’s real agenda is profoundly anti-human. PETA president and co-founder, Ingrid Newkirk admitted as much stating that: “Even if animal research resulted in a cure for AIDS [or cancer or other horrible diseases], we’d be against it.”
When Hamas terrorists used flaming falcons and exploding donkeys to kill Israeli civilians, PETA under political pressure denounced Hamas — but only for harming and killing the animals — not for endangering or harming the school children in the way of these living weapons. This lack of concern for people is truly disturbing.
PETA’s supporters have filed comments with the Department of Transportation hoping to shut down any medical research with animals. One comment simply said: “Stop experimenting on animals. Experiment on your children and mothers instead.” Then with absolutely no sense of irony, this commenter also accused those who reject the idea of using children and mothers in medical research of being “a bunch of barbarians.” Let that sink in.
But PETA’s track record on animals isn’t so great either. For example, in Virginia, PETA activists were charged for criminal animal abuse. Then there is the PETA animal shelter kill rate from 2007-2017 — a full decade — which averaged 95.3 percent. Simply stated animals that were intended for adoptions were abused and then killed in 95% of the cases by an organization supposedly promoting the ethical treatment of animals. A PETA spokesperson quipped, “there are fates worse than euthanasia.”
The ends to which this organization will go to supposedly defend the interests of animals knows no bounds. PETA led the move to change the packaging of animal crackers that used to show cartoon circus animals in carton railcar cages. Thanks to PETA, the carton animals now roam free on the African Savannah. I’m sure we can all feel better than cartoon lions and elephants now roam a cartoon grassland.
Sadly, as silly as that effort was, far more serious is the mounting public relations campaign PETA is waging to pressure airlines to refuse to transport animals (below deck in climate controlled areas of the plane) that will be used in medical research. To date, United Airlines has caved to PETA’s pressure campaign. What’s so strange is that United’s CEO, Carlos Munoz, is alive today because he had a heart transplant that was made possible because of medical animal research.
Here’s some context — airlines often allow passengers to bring comfort pets to travel by their side — dogs, cats, rabbits, pigs, peacocks, ducks, roosters, turkeys, and even kangaroos and miniature horses. This inconveniences other passengers and in some cases causes severe health problems for other passengers. On the other hand airlines are caving to PETA’s pressure campaign and refusing to transport animals used in ethical, humane & government mandated testing of new cures. These animals will not inconvenience or endanger any passengers. But this is the weird world you get when the lunatics run the asylum.
Airlines win kudos for donating flights to children in need of cancer treatment at specialized medical centers far from their home. At the same time, some airlines refuse to transport research animals and make it more difficult to develop the very cures and medicines needed to cure these sick children.
It is illegal for the airlines to discriminate against transportation of animals for research purposes. Public carriers have long been prohibited from discriminating when it comes to transportation. Non-discrimination laws for airlines do not simply prevent racial discrimination. The law also prevents an airline from transporting animals for zoos, or vacationing passengers, or as comfort animals, and then refusing to transport similar animals to be used in lawful and ethical medical research.
The law is clear — if the airline is willing to ship one woman’s dog or cat, it must also ship other similar animals being transported even if for different purposes — including medical research. Airlines have no real basis for objecting because they are paid to transport them, and these animals actually have no impact on their passengers as they would be shipped below the passenger compartment.
But because they are fearful of the bad press of PETA’s false claims of animal torture, Airlines give in. We all love pets and animals. But who wants to be slimmed by PETA as the equivalent of a war criminal for trying develop heart translate procedures and medicines or for curing cancer?
We need the Department of Transportation to enforce the law. We wouldn’t tolerate an airline discriminating against a racial or ethnic group and we shouldn’t tolerate this form of discrimination either. The lives of countless millions depend on the cures and medicines that are being developed in careful, thoughtful and ethical ways.
When the federal government sets out to solve a problem, it often begins by making the problem larger.
For example, lawmakers may want to reduce pollution. Or cut down on the use of fossil fuels. So they pass a “Clean Air Act,” or mandate the use of renewable fuels. But now they need inspectors. And lawyers to file (and respond to) lawsuits. The big problem gets bigger as it gets bogged down in bureaucracy, and a solution may seem ever further away.
As a Microsoft blogger once joked, “if the solution begins with ‘First, install…’ you’ve pretty much lost out of the gate. Solving a five-minute problem by taking a half-hour to download and install a program is a net loss.” The same can be said about Washington. If the answer is “First, pass legislation…” then your problem probably isn’t going to get solved, especially in today’s environment of divided government.
But bad things keep happening to good people. For example, anyone with insurance can be sent to a care center that’s not covered by their network and end up with a big bill. That isn’t fair. So how can policymakers bring down their health care costs?
As always, Washington’s response begins with a big bill, the “Lower Health Care Costs Act of 2019,” penned by Tennessee Republican Lamar Alexander. One goal of the bill is to set prices in cases of surprise billing, so insured patients that are taken to out-of-network facilities without their knowledge aren’t hit with huge bills. The bill plans do to so by capping provider costs at the median in-network rate.
If the LHCC gets the prices wrong -and if the history of price controls provides any indication, it will – it could lead to yet another Obamacare-esque death spiral, where premiums rise, hospitals lose money, and doctors stop seeing patients.
The legislation’s big-government, top-down solutions won’t amount to a very effective way to push back against high prices. The faster and more effective way is to encourage competition. One way to do that is by allowing market negotiations to proceed.
The STOP Surprise Medical Bills Act, introduced by Sen. Bill Cassidy, M.D. (R-La.) and Sen. Tom Carper (D-Del.), would do just that. When cases of surprise medical bills pop up, The STOP Surprise Medical Bills Act would allow all players in the healthcare industry to submit proposals to an arbiter, who would ensure that the best offer for consumers wins the day. This process will create far more informed, data-driven decisions than the LHCC’s blanket price controls ever could.
We also need more doctors, which would increase competition among physicians and help force prices down. Instead, we’re chasing doctors out of the profession. “The United States could see a shortage of up to 120,000 physicians by 2030,” warns the Association of American Medical Colleges.
Well, federal policies can make it more difficult than ever to practice medicine. For example, it can cost more to treat Medicaid patients than the federal government is willing to pay. That squeeze is an example of the wrong way to approach price cuts, yet it’s the one that Washington usually turns to. It’s at least partially responsible for the decline in the number of doctors.
Big medical bills are a big problem. Together we can solve that problem. But first, let’s prevent Washington from making it even bigger by imposing the LHCC Act.
By Red State•
It’s bad enough when politicians rob from future generations by piling on debt to the nation’s ruinous finances. Now the Administration and Senate Republicans are considering paying for Nancy Pelosi’s exorbitant spending demands by decimating medical innovation.
But don’t worry, kids: sure it’ll kill future life-saving medicines from ever coming to market, but when you’re done paying for this Pelosi-scale largess, I’m not sure you’ll be able to afford anything nice, anyway.
The deal reportedly under discussion in the Senate would be to meet almost all of Pelosi’s spending demands — did I mention that Republicans control the Senate and President Trump is our chief executive? — and “paying” for it in part by installing crudely designed price controls on the drug industry.
This bright idea is the brain child of Sen. Ron Wyden (D-OR), the chairman, er, ranking member, of the Senate Finance Committee. (Sorry – it’s easy to get confused about who is running things over there).
The headline at Politico tells you everything you need to know: “Senate Republicans pray Trump will take budget deal.”
Imagine how that’s going to go:
“So you’re meeting Pelosi’s spending levels?”
“Yes, sir, Mr. President.”
“And raising the debt ceiling?”
“How the hell are you going to pay for it?”
“Price controls, sir.”
It’s a complete disgrace, and I expect Trump will not take kindly to an outcome where he gets taken for a ride by Nancy Pelosi.
The price controls under discussion are a “Squad”-caliber idea, the “Squad” being the quartet of Socialist Democrats led by Alexandria Ocasio-Cortez who spent last week attacking Pelosi as a racist for not being left-wing enough (you can’t make this up!).
I describe it that way because the proposal is the same combination of Che Guevera-t-shirt-wearing ideological zealotry and breathtaking economic illiteracy responsible for such gems as AOC’s comically melodramatic pronouncement that “the world is going to end in 12 years” because of global warming.
Price controls are already the economic equivalent of a child demanding a pony: they demand an outcome without any regard or awareness of the reality of making it so. We want lower prices, so we’ll order them lower! Except, the cost of production remained just the same, or even increased once the people putting nation-state-level amounts of capital on the line just noticed the infantile children bickering in Congress are about to make a big mess.
The cost of producing one new drug is typically $2.5 billion. Private companies have to pay that up front, without knowing if the effort will succeed or fail, or in this case whether Wyden and Pelosi will decide they need some of that moolah to pay for women’s studies departments, free abortions and sex changes, and only Heaven knows what other insanities they can dream up.
But, you know, some children at least know something about ponies. Some demand a Shetland, for example. The Wyden child doesn’t even know what a pony is, he’s just throwing a tantrum. That’s my best attempt at explaining how stupidly designed these particular price controls are.
First, the proposal punishes price increases of individual drugs compared to inflation. Not only does this ignore any particular circumstances (sudden spike in supply cost for a particular compound, for example), it creates a giant incentive to pad price increases across the entire product line, untethering the price of any individual drug from actual production costs.
Second, the vehicle for delivering these price controls is the Medicare Part D, otherwise known as the one part of the entire federal health care system that shows any sanity and cost-effectiveness — thanks to its use of market principles.
Part D is the only large government program in the history of humanity to come in 40% under budget, which is practically on par with feeding the crowd of 5000 from a basket when you think of the endless list of failed health care “reforms” that cost an eye-watering amount above their price tag.
Why did Part D work? Because it managed to install some semblance of a market, which consumer choice, and real competition, in the form of the plans that compete for patients. Exactly the opposite of the price controls we may be on the verge of adopting to “pay for” Pelosi’s world domination tour — sorry, the obscene spending she demanded and the Senate Republicans appear all too happy to accept.
It’s shameful. Something deep inside the chests of Senate Republicans should cause them to reject a bad Pelosi proposal — simply as a matter of self-respect! But if you believe that most politicians have anything more than trace amounts of self-respect, boy have I got some wonderful price controls to sell you!
Perhaps it’s time for Bernie Sanders to put his money where his mouth is and pay his staffers a “living wage”—and the overtime they should be entitled to.
For all is rhetoric, it may turn out that socialist Sen. Bernie Sanders is just another hypocritical politician who takes money from big corporations, invests in Wall Street and, reportedly, pays his workers “poverty wages” (and NO overtime)—despite the fact that they’re unionized.
Back in March, to show his “pro-union” bonafides, Bernie Sanders made headlines when he encouraged his staffers to unionize with the United Food & Commercial Workers, turning his campaign into the first-ever unionized presidential campaign.
However, as often happens when activists who campaign to dictate standards upon others actually have to live under those standards, things do not always go as planned.
On Thursday, the same day that the House of Representatives passed a bill to raise the federal minimum wage to $15 an hour—which Sanders has long advocated for—the Washington Post ran an article that shed some light on a wage dispute that is currently going on within his campaign.
Apparently, Sanders’ campaign workers are lashing out at campaign management regarding the low wages that they are receiving.
“I am struggling financially to do my job, and in my state, we’ve already had 4 people quit in the past 4 weeks because of financial struggles,” one field organizer reportedly wrote on a message board to Sanders’ campaign manager Faiz Shakir.
Another employee wrote his co-workers “shouldn’t have to get payday loans to sustain themselves.”
Then, there was this interesting statement:
The draft letter estimated that field organizers were working 60 hours per week at minimum, dropping their average hourly pay to less than $13. [Emphasis added.]
As field organizers are paid an annual salary of $36,000 under their new union contract, things would be fine—if they are only working 40 hours per week.
However, it appears they are not.
If they are truly working 60 hours per week (or 3,000 hours per year), on a salary of $36,000, they are only making $12 per hour, instead of the $17.30 they should be making on a standard 40-hour week, 2,080-hours per work year.
Obviously, $12 per hour is far less than the $15 Bernie Sanders claims to support.
However, it’s worse than that.
Based on the article, it also appears that Sanders is not paying overtime.
Under the Fair Labor Standards Act (FLSA) of 1938, employees who are not exempted from the law are entitled to time and one half pay for every hour worked after 40 hours in a given workweek.[Some states (and, more importantly, some union contracts) actually mandate time and one half after eight hours.]
If the Sanders campaign workers are not exempt from the FLSA and are entitled to overtime, they should be making nearly $26 per hour for every hour worked over 40.
Following the 2016 election, the DNC was sued by former field organizers who alleged that the “the state party defendants conspired with one another and with Defendant DNC to unlawfully designate Plaintiffs, and those similarly situated, as exempt employees under the FLSA and applicable state wage statutes, thereby denying Plaintiffs full and appropriate compensation.”
Unfortunately for the DNC’s field organizers, the suit was dismissed in 2018.
In dismissing the overtime suit, according to this summary, “the Court relied on an often-overlooked defense to the Fair Labor Standard Act (“FLSA”) – namely, that the FLSA only covers employees engaged in interstate commerce as opposed to employees engaged in purely local activities. [Emphasis added.]”
That case involved multiple state parties (as well as the DNC)–and not a singular candidate.
In the case of Bernie Sanders, however, a court could determine his campaign to be a singular employer…and, if so, it is definitelyoperating across state lines (interstate commerce).
It is also possible that the new union contract may aid a court in establishing that employees are not exempted from the FLSA. However, neither the campaign, nor the UFCW has released the contract to the public.
Perhaps it’s time for Bernie Sanders to, quite literally, put his money where his mouth is.
A new proposal under discussion by the Senate Finance Committee is a perfect example of the folly of trying to centrally design the economy — in this case by a ham-handed attempt at price controls.
The proposal, from Sen. Ron Wyden (D-OR) and under consideration by Chairman Chuck Grassley (R-IA), would change the Medicare Part D prescription drug rebate to penalize drugs whose prices rise faster than the rate of inflation.
It’s ironic the proposal targets Part D, one of the few islands of economic sanity to be found in the health care sector, which, beset by rampant government intervention, suffers from a wide variety of perverse unintended consequences.
Part D is one of the few government health care programs to successfully foster price-based productivity increases. In most parts of the economy, over time, prices go down and quality goes up, due to increases in productivity. The underlying mechanism driving this is competition.
One sign of how successful Part D has been in wielding competition is that in its first decade of existence, it cost over 40% less than what the Congressional Budget Office estimated it would, a historical and underappreciated achievement.
Tacking on feel-good, one-off pricing rules like Wyden’s “faster than inflation” penalty could easily disrupt the market-based dynamics that enabled Part D to flourish in the first place.
It’s just silly to think that something as complex, distributed and organic as a worldwide market for pharmaceutical drugs could be controlled by something as ramshackle as a “faster than inflation” rule.
Consider the variety of pricing mechanisms that exist in well-functioning markets. In retail, there are coupons, package deals, membership plans and other discounts. In the stock market, there is the “continuous auction,” providing ongoing price discovery that can react to new information in a matter of seconds.
Amazon’s server rental business offers clients a tremendous range of pricing options, split by eighteen datacenter regions, dozens of server types, and several tiers of availability.
There is a whole world of financing, from store-offered, no interest payment plans to credit cards to mortgages. Stores employ all manor of psychological pricing tricks, such as charging 99 cents instead of $1. One of the more incredible such tricks, which would be hard to believe without the well-established research backing it up, is that prices that contain fewer syllables (when read out loud) are more attractive than those with more syllables. For instance, $28.16 (five syllables) is better than $27.82 (seven syllables).
The incredible diversity in pricing practices stems from the decentralized nature of the market. You could never ask a single committee, or even a large organization, to come up with this level of creativity and variety on its own. It’s only from the organic interaction between millions of businesses and billions of customers, each expertly seeking their own interests, that it can ever arise.
You might compare Wyden’s “faster than inflation” proposal to the fences in Jurassic Park — “life finds a way,” as Dr. Ian Malcolm tells us, foreshadowing the inability of the park to contain the beasts contained within. Except, at least the 40-foot electric fences were a good faith effort. Wyden’s proposal is more like if they attempted to keep the T-Rex at bay with only the thin walls of the bathroom hut the hate-able lawyer ran and hid inside, shortly before becoming a dinosaur’s dinner.
In other word’s this “faster than inflation” rule is a laughable, pitiful attempt at something that isn’t even achievable by the most expert, determined effort — something like, say, the Soviet Union, which tried, and failed, to put price controls into practice at super power scale.
But that’s not to say it can’t do harm. At the very least, it will increase the cost of participating in the market, both in terms of compliance costs, and in the changed incentives and their inevitable unintended consequences. For example, a company that requires more revenue to survive might raise the prices slightly on all its products, instead of steeply on just one. How this all plays out is impossible to predict. What can be said for certain is the market’s “logic” would now be less about providing the most value for customers at the lowest price, and now more about the political ramifications of pricing decisions.
More specifically, as it relates to the Part D drug market in particular, the rule could crowd out existing rebates negotiated by the plans buying the drugs. Many plans have already secured “price protection rebates” which kick in if prices increase more rapidly than some agreed-upon threshold. In other words, the market has already invented, in a much more sophisticated and dynamic way, the “faster than inflation” rule on its own.
The worst case scenario is more dire. Generally speaking, fostering well-functioning markets in the health care sphere is exceedingly difficult, given the immense government intervention at every level. Part D’s success in doing so is nearly unique. Additional rules that make supply and demand less important to how the market functions could result in it ceasing to function as a market entirely. It certainly would not be the first time the government accidentally killed a market.
Wyden’s proposal exemplifies the folly of centrally-designed price controls. It will harm one of the only well-functioning parts of the federal government’s health care policy. For those reasons, Chairman Grassley and Committee Republicans should cast it in the dustbin of bad socialist ideas.
Ezra Klein thinks it’s “ridiculous” to ask Democratic presidential candidates whether they want to abolish private health insurance. It’s supposedly ridiculous because the correct answer isn’t yes or no, but “it depends.”
Several of the Democratic candidates have endorsed Senator Sanders’s Medicare for All bill. Klein takes up the subject:[I]f you assume both the generosity and the financing of Sanders’s plan, there’s really no reason to debate private insurance. If the government will cover everything, with no copays or deductibles or hidden forms of rationing, then there’s no need for private coverage. . . .[Sanders’s bill] doesn’t actually abolish private insurance. It outlaws “health insurance coverage that duplicates the benefits provided under this Act.” If the proposed benefits contracted during the legislative process, it would open more room for private insurers to enter the system. So even Sanders’s answer to this question isn’t truly “yes” or “no.” It depends on what’s covered, which in turn depends on how much Americans are willing to pay in taxes.
Klein then lists questions that he thinks debate moderators should be asking instead: Would your plan include cost sharing at the point of service, how would prices be determined, and so on. They’re not bad questions. But neither is the question about outlawing private insurance. In the first place, whether the Sanders proposal would change in the legislative process is irrelevant to the question of what the candidates are seeking. Their endorsement tells us the answer to that question. It is also hard to picture the Sanders proposal changing so much that anything like the private health-insurance policies that scores of millions of Americans now rely on could survive.
Several candidates — Gillibrand, Warren, Sanders, Harris, and probably a few others I’ve forgotten — have endorsed, of their own free will, making it illegal for Americans to buy the kind of insurance most of them now have. Americans should be informed about what Democratic health programs will look like. They should know as well whether they’ll have a choice about participating.
House Speaker Nancy Pelosi is considering a monumental change to Medicare — and believes that President Donald Trump might support her plan.
Her big idea? Binding arbitration — a method that empowers government-appointed “arbitrators” to dictate the price of new medications and treatments. She hopes it’ll lower drug spending.
That would represent an enormous change from the status quo. Right now, drug makers negotiate directly with private insurers and healthcare providers.
Arbitration is just a fig leaf for government price controls. Arbitrators are supposed to be unbiased. But they’d likely always side with the government officials who appointed them — and set prices well below fair-market value. Like all price controls, arbitration would discourage medical innovation.
Under Medicare, drug coverage is broken into two parts. Medicare Part B covers potent medicines, like chemo- and immunotherapies, that physicians administer in hospitals and doctor’s offices. Medicare Part D covers prescription drugs that patients can pick up at the pharmacy.
For both programs, drug prices are determined through negotiations between drug makers and private payers, like hospitals or insurers.
In a binding arbitration system, if Medicare officials aren’t satisfied with those negotiated prices, they could appoint an arbitrator to do their bidding. Medicare officials would explain to arbitrators why they feel a lower price is justified. Pharmaceutical companies would justify their own suggested price.
Arbitrators would then choose a legally binding price. And their decision wouldn’t be limited to the two proposals on offer.
This type of dispute resolution is also called “baseball arbitration.” Baseball teams are well known for bringing in neutral arbitrators to resolve contract disputes. But Pelosi’s arbitration plan shouldn’t be compared to the big leagues, as the government would run the entire show. Government officials would get to pick the arbitrators — and would almost certainly choose ideologues who agree with them. So the “negotiation” would function identically to price controls.
Price controls always stifle innovation and harm patients in the long run.
Drug development is a risky business. It takes about $2.6 billion and between 10 and 12 years, on average, to create just one new drug. Around 90 percent of medicines never make it past clinical trials.
Investors are willing to take such financial risks on the off chance their drug succeeds and is profitable. Price controls eliminate that potential by making it harder for companies to recoup their R&D expenses. No investor would risk her capital knowing the government could undervalue her discoveries.
Just look at what price controls did to Europe. In the 1970s, European companies made more than half of the world’s new drugs. Then governments across Europe began to implement various price control schemes over the next 10 years. European countries develop less than 33 percent of new drugs today.
The United States, on the other hand, is the global leader in drug development — and has done so for over three decades. Because our healthcare system values drugs fairly, drug innovators are eager to research and develop drugs stateside. In fact, America’s biopharmaceutical industry dedicated close to $90 billion in R&D efforts in 2016.
All that investment has paid off, too. In the United States, researchers are developing roughly 4,000 new medicines targeting a range of diseases — including potential cures to Alzheimer’s, cancer, and diabetes.
If binding arbitration takes off, Americans may never benefit from these potential treatments. Instead, patients would be left at the mercy of diseases for which there are currently no cures.
Binding arbitration doesn’t deserve President Trump’s support — or the support of Democrats. Letting the government set drug prices would hinder future medical advances.
Health Reform: How do you enact a massive new program, and then keep it from being repealed after it fails? It’s simple. Just pull the numbers out of thin air. That’s basically what happened with ObamaCare.
When centrist Democrats were deciding whether to support ObamaCare in 2010, the “nonpartisan” Congressional Budget Office told them not to worry. The law, it said, would cut the deficit. It would bring 24 million people into the new ObamaCare exchanges. Subsidy costs would be modest. And the number of uninsured would fall by more than half. Those Dems signed on.
ObamaCare Repeal Thwarted
Seven years later, as centrist Republicans contemplated an ObamaCare repeal-and-replace plan, the CBO warned that doing so would boost the number of uninsured by 22 million. That scared enough Republicans away to kill the bill.
Turns out, all those forecasts were way off.
ObamaCare boosted the deficit in its first 10 years. Only 8 million, not 24 million, people enrolled in the ObamaCare exchanges. The average cost of ObamaCare subsidies is 11% higher, and the number uninsured 36% higher, than the CBO projected.
Had the CBO been better at predicting the future of health care under ObamaCare, it’s likely that Democrats would have scaled back their plans, while perhaps seeking Republican input.
Now we learn that the CBO wildly exaggerated the impact of the Republicans’ repeal effort when it said that 22 million would lose coverage as a result. Almost all that loss was from repealing the individual mandate.
Wildly Inflated Numbers
CBO said 7 million people would drop out of the individual insurance market. Another 4 million would lose employer coverage. And 4 million would cancel their Medicaid — even though it’s free. All in the first year.
At the time, we argued that the CBO had hugely inflated those numbers because it vastly overestimated the effectiveness of the individual mandate.
Ironically, Republicans ended up repealing the individual mandate tax penalty, but keeping the rest of ObamaCare. So what happened?
This week, the Center for Medicare and Medicaid Services released its latest annual report on national health spending. The intrepid Philip Klein at the Washington Examiner noticed that, buried in a footnote, was a stunning rebuke of those CBO forecasts.
The report says that the mandate repeal will result in only 1.5 million dropping out of the individual insurance market, and 1 million from employer plans. CMS says Medicaid enrollment will “be unaffected.”
In other words, the CBO was off by a factor of six.
These forecasting errors don’t even rise to the “good enough for government work” level. But they were good enough to get ObamaCare on the books, and then keep it there.
By Sally C Pipes • Investor’s Business Daily
Every year for the past four years, the liberal State Assembly has approved the New York Health Act, which would establish a statewide single-payer plan. But the bill always died in the State Senate, where Republicans have held the majority since 2011. These Republicans united with the centrist members of the Independent Democratic Conference to oppose single-payer.
Most of those Independent Democrats, as well as a handful of Republicans, lost their elections to progressive challengers in 2018. So when the new Democratic majority is sworn in this January, there may be enough single-payer proponents to radically reform New York’s health care system. State Senator Gustavo Rivera, a Bronx Democrat, has pledged to put forward a new single-payer bill in January. Assembly Member Richard Gottfried, a Democrat from Manhattan, confidently predicted the legislature is “on track” to pass the proposal. Continue reading
By Christopher Jacobs • The Federalist
Now they tell us! A Gallup poll, conducted last month to coincide with the midterm elections and released on Tuesday, demonstrated what I had posited for much of the summer: Individuals care more about rising health insurance premiums than coverage of pre-existing condition protections.
Of course, liberal think tanks and the media had no interest in promoting this narrative, posing misleading and one-sided polling questions to conclude that individuals liked Obamacare’s pre-existing condition “protections,” without simultaneously asking whether people liked the cost of those provisions.
Overwhelming Concern about Premiums
The Gallup survey asked the public whether it viewed each of four scenarios as a major concern for them. Among those: “Your health insurance plan will require you to pay higher premiums or a greater portion of medical expenses,” and “you or someone in your immediate family will be denied health insurance coverage for a pre-existing medical condition.” Continue reading
by Doug Badger • National Review
Critics of American health care often ask why ours is the only highly developed country without a taxpayer-funded universal health-care system.
It is a question meant to answer itself: There is no good reason, so the U.S. should fall in line with European financing methods. That is the view of advocates of “Medicare For All,” a proposal backed by most House Democrats.
But the question deserves more than a rhetorical response. Health care is financed differently in the United States because it evolved differently. Private arrangements among hospitals, doctors, employers, and labor unions to finance medical insurance developed and matured over the course of decades, abetted by government policy that treats employer-sponsored health benefits differently than wages for tax purposes. That generally did not happen in Europe.
The American approach offers several advantages that often are overlooked. Continue reading
By Charlie Katebi • The Federalist
Over the last several years, states that expanded Medicaid to able-bodied adults have seen costs skyrocket and patients lose access to critical medical care. Yet despite this disastrous track record, many are recklessly rushing to expand Medicaid in their states.
On July 6, Medicaid expansion advocates delivered boxes full of signatures to Idaho’s secretary of state to place the issue on the state’s ballot in November. Just one day earlier, another ballot drive collected enough signatures to expand Medicaid in Nebraska. In Maine, pro-Medicaid lawmakers are preparing to raise fresh new taxes to grow the program.
The leaders of these campaigns argue that expanding Medicaid will provide health care access to the needy. Unfortunately, expanding coverage to able-bodied adults imposes enormous harm on Medicaid’s traditional enrollees, which include individuals with severe Continue reading
By Nan Hayworth • The Hill
As a physician whose career in medicine was dedicated to preserving and improving my patients’ health, I know firsthand how important it is for everyone to have access to care. This is a fundamental precept, morally and pragmatically sound, that should be honored by all who seek to transform for the better America’s flawed system of health care delivery.
Regrettably, since its passage in 2010, the Affordable Care Act (ACA) has had the net general effect of raising the cost of health insurance while reducing the quality and variety of the services that insurance covers. This is the opposite of what was intended — but the suffering engendered thereby is real and painful.
The best-case remedy would be to repeal the ACA completely and replace it with a much simpler, more targeted set of common-sense interventions to empower consumers and ensure their access to Continue reading